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| China has long been a popular tourist destination thanks to its rich historical and cultural attractions, and breathtaking natural landscape. The economic development of China has also turned some parts of the country into modern metropolises. With many facets, China’s inbound tourism is booming. At the same time, with the nation’s rising standard of living, not only is domestic tourism growing fast - many more Chinese are flying abroad to experience a different lifestyle. |
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The World Tourism Organization projected that by 2020, China will become the world’s most popular destination and the fourth largest source of outbound tourists. |
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| Currently, China is the leading tourist destination in Asia and ranks fourth in the world. In 2006, China overtook Italy’s position as the world’s sixth top spender in international tourism. Within Asia, China ranked second in terms of international tourism expenditure (US$24.3 billion), next only to Japan (US$26.9 billion). The World Tourism Organization projected that by 2020, China will become the world’s most popular destination and the fourth largest source of outbound tourists. |
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| Inbound Tourism |
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| In 2007, the number of overseas tourists reached 131.9 million. Within this figure, the majority were residents from Hong Kong and Macau (76.7%). This is quite possibly due to their geographic proximity to the mainland. Unsurprisingly, Guangdong was their main travel destination. In the past few years (with the exception of the period spanning the 2003 SARS outbreak), China’s inbound tourist arrivals have grown steadily. From 2001 to 2007, the average annual growth rate of arrivals was 6.8%. In 2007, foreign tourist arrivals reached 26.1 million. From 2001 to 2006, the average growth of foreign tourist arrivals reached 15.1%. |
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In 2007, foreign tourist arrivals reached 26.1 million. From 2001 to 2006, the average growth rate of foreign tourist arrivals reached 15.1%. |
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| Of the 26.1 million foreign tourist arrivals in 2007, more than half were traditional tourists - that is to say, they were in China for sightseeing or leisure purposes. Conferences and business trips ranked the second major reason for visiting the country, with 18% of the market share. In terms of inbound tourism visitor generating sources, Europe ranked first in 2007 with a market share of 23.8%. |
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Of the 26.1 million foreign tourist arrivals in 2007, more than half were traditional tourists - that is to say, they were in China for sightseeing or leisure purposes. Conferences and business trips ranked the second major reason for visiting the country, with 18% of the market share. |
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| The rapidly growing overseas tourist arrivals also brought good fortune to China. In 2006, China raked in about US$33.9 billion, which was translated into a 13.8% annual average growth from 2001 to 2006. |
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| Out of the US$33.9 billion inbound tourism revenue in 2006, about 1/3 was spent on shopping, making it the top tourist expenditure. |
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Out of the US$ 3.9 billion inbound tourism revenue in 2006, about 1/3 was spent on shopping, making it the top tourist expenditure. |
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| Long distance transportation (mainly air fare) ranked second with a 21.7% share. Accommodation and F&B came in third and fourth, with a share of 14.4% and 10.3% respectively. Figure 3.10.4 illustrates this breakdown. |
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| In 2007, Guangdong, Beijing, Shanghai, Jiangsu and Zhejiang were the top provinces in terms of inbound tourism revenue. In total, they accounted for 64.8% of the total market share. |
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| Domestic Tourism |
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| With a booming economy, domestic tourism in China has developed fast. The Chinese government also views domestic tourism as a good channel to boost domestic demand, which will enable the country to be less dependent on the economic development of investments and exports. China has created several week-long holidays (known as Golden Weeks) to encourage people to travel around the country. |
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| Nevertheless, Golden Weeks also have its drawbacks. With traveling concentrated within these few Golden Weeks, the whole country becomes paralyzed by hosts of travelers. As a result, many people have suggested that the government remove the Golden Week system and replace it with a compulsory pay-leave system. Heeding the advice of its people, the Labor Day Golden Week was removed in 2008. Nevertheless the issues that revolved around Golden Week may be viewed as a happy problem as domestic tourism continues to boom. |
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| In 2007, the number of domestic tourists reached 1610 million (see Figure 3.10.5), with an average annual growth rate of 12.7% from 2001 to 2007. The same year also saw domestic tourism revenue reach RMB 777.1 billion, with average annual growth rates of 14.1% from 2001 to 2007. |
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By the end of 2006, there were 585 foreign-invested hotels with star ratings. They raked in RMB 28.1 billion, accounting for 19.0% of China’s total. |
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| Booming inbound and domestic tourism also make hotels an attractive business in China. By the end of 2006, there were 585 foreign-invested hotels with star ratings. They raked in RMB 28.1 billion, accounting for 19.0% of China’s total. |
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| Outbound Tourism |
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| China’s outbound tourism market was formerly rather miniscule. This was partly due to the low income level and partly caused by the troublesome visa application process. However, these days, traveling overseas has become much easier for many mainland Chinese. |
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Soon after, in September 2004, the majority of European countries were also added to the ADS list. In December 2007, the United States, another important world tourist destination, was granted ADS as well. |
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| Since China’s entry to the WTO, more and more countries have become accessible to mainland Chinese through the approved destination status (ADS) scheme. Through ADS, those countries are able to issue tourist visas to mainland Chinese. In 2002, non-Asia Pacific countries were included for the first time, including Turkey and Egypt, and in 2003, Germany, the first European country, was granted ADS. Soon after, in September 2004, the majority of European countries were also added to the ADS list. By then, the door of Europe, the world’s most important tourism market, was opened to mainland Chinese. In December 2007, the United States, another important world tourist destination, was granted ADS as well. |
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| Hong Kong and Macau, the two most important outbound tourism destinations for mainland Chinese, have adopted the Individual Visitor Scheme (IVS) since mid-2003 to further facilitate mainland Chinese travel to Hong Kong and Macau. Under IVS, mainland Chinese from certain cities are able to travel to Hong Kong and Macau on an individual visa application basis, and do not need to join a tour group which they would have otherwise been required to do. |
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From 2001 to 2006, the expenditure of Chinese tourists overseas increased from US$13.9 billion to US$24.3 billion, growing at 11.8% annually. |
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| Coupled with the rising living standards, China’s outbound tourism has been developing fast. In 2007, outbound travelers reached 41.0 million, indicating a 22.5% annual growth rate from 2001 to 2007. From 2001 to 2006, the expenditure of Chinese tourists overseas increased from US$13.9 billion to US$24.3 billion, growing at 11.8% annually. |
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| Currently, Asia is still the predominant travel destination for mainland Chinese (accounting for about 90% of all travel). Within the continent, Hong Kong and Macau are the two most important destinations. |
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In January 2008, the China National Tourism Administration (CNTA) announced the launch of a pilot project within the same year. The project will select joint venture tour operators who will be tasked with handling some outbound business. |
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| Including travelers who chose these two destinations for the first leg of their trips, Hong Kong and Macau accounted for about 70% of China’s outbound tourism market shares. |
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| According to the Hong Kong Tourism Board (HKTB), in 2006, mainland tourists traveling to Hong Kong reached 13.6 million, 8.4% higher than in 2005. Of these tourists, 49% were under the IVS scheme. |
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| Meanwhile, mainland China continues to be the biggest visitor generating source market to Hong Kong, accounting for more than 50% of the market share. |
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| Macau is another popular tourist destination for mainland Chinese. According to the Macau Government Tourism Office (MGTO), in 2006, the number of mainland travelers to Macau reached 12.0 million, 14% higher than in 2005. |
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| Mainland China is also the biggest visitor generating source market to Macau, accounting for more than 50% in 2006. |
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| To further develop outbound tourism, China has been engaging in activities beyond its WTO commitment. In January 2008, the China National Tourism Administration (CNTA) announced the launch of a pilot project within the same year. |
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| The project will select joint venture tour operators who will be tasked with handling some outbound business. It is the first time the administration has decided to open its outbound business to foreign investors. |
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Opening the outbound market is not part of China’s commitment to the WTO. Foreign tour agencies are currently limited to inbound and domestic tourism. The future of outbound tourism looks nothing but bright.
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